India-ASEAN

Over a period of five years, India and the Association of South East Asian Nations (ASEAN) negotiated a bilateral free trade agreement — with plenty of difficulty.

Under their initial bilateral framework agreement, signed in Bali on 8 October 2003, the India-ASEAN FTA for goods was supposed to be finalised by 30 June 2005. Negotiations on services would start in 2005 and end in 2007.

After a year’s delay, discussions ground to a halt in June 2006 when India released its ’negative list’ of items to be excluded from tariff reductions — with 900 products, both industrial and agricultural, figuring on the list. (This was down from India’s initial negative list of 1,410 items.) India’s agriculture ministry, in particular, was arguing hard to exclude commodities like rubber, pepper, tea, coffee and palm oil from the deal. Rules of origin have been the other thorny issue.

Two months later, in August 2006, Delhi issued a revised list, pruned down to 560 items. However, tremendous fears about the impacts of the India-ASEAN FTA on farmers continued to rattle the discussion.

By early 2007, in the midst of the new biofuels boom, palm oil became a central blockage point as Indonesia and Malaysia, both top palm oil exporters, struggled to get India to lower its tariffs.

On 28 August 2008, a deal was finally concluded. The agreement was signed in 2009 and took effect (trade in goods) with 5 of the countries and India in January 2010, (Singapore, Malaysia, Brunei, Myanmar and Thailand). India is pushing – without much apparent process – for a services liberalization deal with the ASEAN countries.

last update: May 2012

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The “necessary flexibility” that Prime Minister Manmohan Singh has said India will show in order to conclude by March the free trade agreement with the Association of South-East Asian Nations (Asean) may not be as daunting a task as some might imagine - because the gap between the positions on the two sides does not look unbridgeable.

India is willing to grant concessions on tariffs for the four agricultural commodities that proved to be a hurdle in finalising the India Asean free trade agreement but made it clear that it expected other countries to match its steps to wrap up the deal.

In a small but significant step forward, Prime Minister Manmohan Singh today said negotiations for the proposed Free Trade Agreement (FTA) with the 10-member Asean would be wrapped up by March next year and that India would show “necessary flexibility” to achieve this goal.

India’s problems with the free trade agreement being worked out with the Asean notwithstanding, the country is eagerly exploring the possibility of entering into a comprehensive economic partnership agreement with the sixteen East Asia Summit members, including the 10 Asean countries, China, Japan, Korea, Australia and New Zealand.

The much-hyped proposed free trade agreement between India and Asean seems to be running into trouble. Asean’s demand that India bring down customs duties on four sensitive agricultural commodities to levels much lower than what New Delhi finds ‘acceptable’ has put a question mark over the deal.

A bilateral agreement on non-conventional energy and another on cultural exchanges are among the agreements to be signed when Thai Prime Minister Surayud Chulanont arrives here on a two-day visit on June 26. Leading a 30-member business delegation, the visiting leader is going to push for an early conclusion of the free trade agreement (FTA) between India and Thailand.

India’s latest offer on duty cuts under the proposed FTA with ASEAN addresses long-term concerns of tea, coffee and pepper producers who are embarking on a major replantation drive, government has said.

Rekindling differences with his senior colleague Kamal Nath, Minister of State for Commerce Jairam Ramesh has written to the Prime Minister seeking review of the proposed reduction in customs duty on farm products under the Free Trade Agreement with Asean.

Two days after Panchayati Raj Minister Mani Shankar Aiyar had a dig at the Prime Minister over economic reforms and 9.2 per cent growth at a CII meeting, Minister of State for Commerce Jairam Ramesh has cautioned Manmohan Singh over parts of the proposed free trade agreement (FTA) with the ASEAN group.

India is bending over backwards with regard to its free trade agreement (FTA) talks with an ostensibly disinterested Asean. Sources say the commerce ministry is now considering breaking India’s 709-strong sensitive list with a view to shifting some of them to the normal track, which entails elimination of tariffs latest by 2015.

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